Earnings management and corporate governance in Africa: Sustainable development, challenges, and policy recommendations

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Abstract

Despite growing research on corporate governance and financial misconduct in Africa, most studies remain fragmented, focusing on specific countries or isolated mechanisms. This underscores the need for a comprehensive synthesis to develop a holistic framework addressing earnings manipulation across the continent’s diverse contexts to advance sustainable financial governance. To fill this gap, this study systematically reviews 45 articles using the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) methodology (Moher et al., 2009) to identify factors that strengthen governance’s role in mitigating earnings manipulation throughout Africa. The findings reveal notable regional variations. Studies from North Africa suggest governance effectiveness depends on ownership structures (family, state, or managerial) and institutional reforms. Research in West Africa indicates risk management committees and board financial expertise are important, though political interference may reduce their impact. East African studies find gender diversity and institutional ownership beneficial, despite some paradoxical results on board independence. Studies on South Africa highlight that a strong regulatory environment, audit quality, and ethical leadership can enhance internal controls. Finally, research from Central Africa points to auditor specialization and board mandate stability as key factors in limiting earnings management. Overall, these findings suggest that governance reforms tailored to regional contexts are essential to effectively reduce earnings manipulation and promote sustainable financial governance across Africa.

Keywords: Earnings Management, Corporate Governance, Transparency, Africa, Sustainable Development, ESG, Systematic Literature Review

Authors’ individual contribution: Conceptualization — A.C. and M.I.; Methodology — A.C. and M.A.; Software — A.C. and M.A.; Validation — M.I. and M.A.; Formal Analysis — A.C. and M.A.; Investigation — A.C. and M.I.; Resources — A.C.; Writing — Original Draft — A.C.; Writing — Review & Editing — M.I. and M.A.; Visualization — A.C.; Supervision — M.I.; Project Administration — M.I.; Funding Acquisition — A.C.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: G3, M1, M4

Received: 10.04.2025
Revised: 10.06.2025; 25.08.2025; 06.11.2025
Accepted: 13.11.2025
Published online: 17.11.2025

How to cite this paper: Chemmaa, A., Ibrahimi, M., & Amine, M. (2025). Earnings management and corporate governance in Africa: Sustainable development, challenges, and policy recommendations. Corporate Governance and Sustainability Review, 9(4), 68–74. https://doi.org/10.22495/cgsrv9i4p6